Eight of the biggest IPOs expected in 2021
Last year brought a number of highly anticipated initial public offerings, as the likes of Airbnb (ticker: ABNB), Palantir (PLTR), Snowflake (SNOW), DoorDash (DASH) and Unity Software (U) all hit the market. Despite a pandemic, 2020 turned out to be a great year for IPOs, with 494 IPOs raising a combined $174 billion, setting new records on both counts, according to data from FactSet, a financial data and software company. This year is proving to be great for newly public companies as well, with Coupang (CPNG), AppLovin (APP), Roblox (RBLX), Coinbase (COIN) and UiPath (PATH) all going public through IPO or direct listing. Here are eight of the most anticipated upcoming IPOs to watch in 2021.
It’s no surprise that Instacart, the grocery delivery app, is anxious to go public. Its closest analog among the 2020 IPOs was DoorDash, which saw rabid investor demand, going public at a $32 billion valuation before soaring on its first day of trading to a valuation of roughly $70 billion. Although it raised financing at a $17.7 billion valuation last year, Instacart reportedly hired Goldman Sachs (GS) to be its lead underwriter in its widely anticipated 2021 IPO, hoping to fetch a valuation of around $30 billion. That early 2021 target looks low now, with the company raising money at a $39 billion valuation in March. The pandemic rapidly accelerated the business; Instacart reportedly hit three years’ worth of growth metrics in a period of 30 days.
Potential 2021 IPO valuation: at least $39 billion
Robinhood, the popular trading app, has had one of the most volatile years of any upcoming IPO on this list. Just a month into the New Year, Robinhood was already being forced to raise $3.4 billion due to a liquidity crisis brought on by the sudden influx of traders sparking volume it couldn’t handle. At the time, the maneuver looked desperate, and the company was facing a PR crisis on the heels of the Reddit-GameStop (GME) debacle, in which Robinhood temporarily banned users from selling certain meme stocks. Robinhood is almost certain to go public by year’s end, with longstanding expectations forecasting an IPO by the end of the second quarter. The question is: What will its valuation be? The range is quite wide right now.
Potential 2021 IPO valuation: between $10 billion and $25 billion
Adopting Robinhood’s agnostic approach to exactly how it’ll go public — either a traditional IPO, direct listing or reverse merger via a special-purpose acquisition company, or SPAC, will do the trick — neighborhood-focused social media and news app Nextdoor is reportedly aspiring to go public at a valuation in the neighborhood of $4 billion or $5 billion. Led by former Square (SQ) chief financial officer Sarah Friar, who was CFO of Square when that company went public in 2015, the company certainly has a C-suite well-suited for an ambitious IPO. Little is known about its financials right now, but Nextdoor did achieve a valuation of $2.2 billion in its last financing round, which took place around 2019. It also boasts a bevy of blue-chip venture capital backers, including Kleiner Perkins, Greylock Partners and Tiger Global Management.
Potential 2021 IPO valuation: between $4 billion and $5 billion
If Stripe goes public in 2021, it could be the most valuable company of the year to make the private-to-public leap. Definitely the hottest upcoming IPO for 2021, the payments processing software company has already successfully attained a valuation higher than that of all previous companies mentioned, raising $600 million at a $95 billion valuation in March — nearly triple its $36 billion price tag 11 months earlier. Stripe has the cachet and investor demand to stay private indefinitely at this point, so if it doesn’t go public in 2021, it will remain a sought-after private company for years to come. The company, founded by Irish brothers Patrick and John Collison, is almost certain to be worth more than $100 billion when it goes public. Tesla (TSLA) CEO Elon Musk and Alphabet’s (GOOG, GOOGL) Capital G are among its many large investors.
Potential 2021 IPO valuation: upward of $95 billion
A play on big data, ThoughtSpot is a technology and analytics company that could go public later in 2021. There aren’t yet official financials for investors to comb through, but the most recent publicly reported revenue numbers saw top-line growth decelerate from 108% in 2019 to 88% in the fiscal first quarter last year. The company hasn’t raised money since August 2019, when it raised $248 million at a $1.95 billion valuation. Customers include large corporations like Walmart (WMT), Disney‘s (DIS) Hulu and convenience store chain 7-Eleven. Another upcoming IPO in 2021 with impressive management, co-founder Ajeet Singh already has experience launching a public company, having founded cloud computing and technology infrastructure company Nutanix (NTNX).
Potential 2021 IPO valuation: more than $2 billion
Of all the companies on this list, the Israeli enterprise software company Monday.com has the most imminent public debut. The company is going public in an IPO on the Nasdaq this week. Although its financials as they stand now aren’t attractive — the business lost $152.2 million on $161.1 million in revenue last year — the top line is rapidly growing, surging more than 84% year over year in the first quarter. Several trends Monday.com is riding are also tailwinds: the market for workplace efficiency tools, which has boomed during the pandemic, and the low-code or no-code software area, which makes customizing software much easier. The ticker symbol will be “MNDY”.
Potential 2021 IPO valuation: more than $6 billion
The Fresh Market
The term initial public offering, in the rare case, can be a bit misleading. Case in point: Organic grocer The Fresh Market is gearing up for its second IPO. It originally debuted on public markets in 2010, but was taken private by the private equity arm of Apollo Global Management LLC in 2016 for $1.36 billion. The company operates 159 stores in 22 states, down from the 186 store-, 27-state footprint the company had in 2016. Although it’s in a fiercely competitive industry with low margins, The Fresh Market reportedly enjoyed same-store sales growth of around 20% last year, led by pandemic-driven changes in consumption and shopping habits.
Potential 2021 IPO valuation: $1 billion or more
Doughnut powerhouse Krispy Kreme has an eerily similar corporate history to The Fresh Market’s. Like The Fresh Market, Krispy Kreme is a North Carolina-based company that traded publicly until being taken private in 2016. The sale price at the time is also almost identical, with Krispy Kreme being acquired for $1.35 billion by JAB Holding Co., which also owns Panera Bread, Caribou Coffee and Peet’s Coffee, among other consumer-facing businesses. Krispy Kreme, like The Fresh Market, has filed confidentially for an IPO. Recent financials filed with the U.S. Securities and Exchange Commission show a company in growth mode, with revenue up more than 23% in the first quarter. Although the company, which will list under the ticker “DNUT”, still lost $3.06 million last quarter, it’s a big improvement from the $11.52 million loss a year earlier.
Potential 2021 IPO valuation: $4 billion (with debt)
Biggest upcoming IPOs for 2021:
— Robinhood Markets
— The Fresh Market
— Krispy Kreme
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Update 06/07/21: This story was published at an earlier date and has been updated with new information.